Page 2 - Default Effect News Today

So i would say that at least 50% was absorbed by the company and 50% was given back to the industry, so to the market. but again, this is up to the fact that we can do it because we are a family company. and, antonio, you negotiate with all the big retailers around the world. im wondering how difficult have those negotiations been, given these surging prices? yeah, you know, i totally understand also their position because if i compare what is happening to retailer in this moment, you know, cost...

Written the book on this. its called the invisible game: the secrets and the science of winning minds and winning deals. kai—markus mueller, a real pleasure having you on this show. and, kai, lets start with this. what are some of the tips and tricks that retailers use? well, there is a wealth of them in consumer psychology. but ill tell you a few of them. a very, very, very strong component is, for example, the default effect. so, for example, if you have a subscription, it renews by default,...

And, you know, we dont have the same access to the profit structures of our branded suppliers, but we do challenge them as hard as we possibly can. ok, so lets start with the raw ingredients. take wheat, for example. before the pandemic, about four years ago, a bushel of wheat was trading on the market at $4.70. that spiked when russia invaded ukraine one year ago. the same amount of wheat went up to almost 13 bucks a bushel. but at the end of march this year, it was sitting at around $7, much l...

So, whether its the grains corridor or exports flows, that can continue to be fraught with risk. and the final thing is the other producing regions, you know, we are seeing some sort of climate change, unfortunately, which does create havoc across the world, particularly tropical countries. so, whether its floods or droughts, inevitably youre going to see some of that in some key producing region. and i think that, again, may affect the supply side. so, bottom line, unfortunately, i think prices...

If shrinkflation is effective depends very much on the perceptual threshold. so, for example, in weight, if i compare two weights, i need at least two grams of difference for 100x100 grams to perceive that difference at all. now, over time, that becomes more, so i maybe forget that last week, you know, that carton of milk or that little piece of tea or so was slightly heavier than this week. so, companies understand what the perceptual threshold for the different units is, they have good chances...

Written the book on this. its called the invisible game: the secrets and the science of winning minds and winning deals. kai—markus mueller, a real pleasure having you on this show. and, kai, lets start with this. what are some of the tips and tricks that retailers use? well, there is a wealth of them in consumer psychology. but ill tell you a few of them. a very, very, very strong component is, for example, the default effect. so, for example, if you have a subscription, it renews by default,...

And we got many example in all europe of tough discussion between trade and, you know, fast—moving goods company. i think that we always have been very reasonable in the last three orfour years in the relationship with the trade, knowing that there is the right limit and the right balance sheet for them, for us, and the right threshold where the two faces can start talking to each other. so i would say its a very tough discussion, but probably thanks to our past years�* history, and the cred...

And very sell the products to consumers. so i would say that its very, very tough discussion for sure. and we got many example in all europe of tough discussion between trader and, you know, fast—moving goods company. i think that we always have been very reasonable in the last three or four years in the relationship with the trade, knowing that there is the right limit and the right balance sheet for them, for us, and the right threshold where the two faces can start talking to each other. so...

So, there you go, thats the start of how prices get set. but how much does psychology play in the price that we pay for our shopping? well, my next guest has literally written the book on this. its called the invisible game: the secrets and the science of winning minds and winning deals. kai—markus mueller, a real pleasure having you on this show. and, kai, lets start with this. what are some of the tips and tricks that retailers use? well, there is a wealth of them in consumer psychology. but...

And we have an agreed kind of profit margin for them on top of their raw material costs and their operating costs. so we know exactly whats going on there. and, you know, we dont have the same access to the profit structures of our branded suppliers, but we do challenge them as hard as we possibly can. ok, so lets start with the raw ingredients. take wheat, for example. before the pandemic, about four years ago, a bushel of wheat was trading on the market at $4.70. that spiked when russia invade...